So the EFG was introduced in the midst of financial crisis/recessionary freefall.
But the clamour for banks to do more to help business continued largely unabated even as the recovery slowly started to take hold through 2010.
While the Coalition sorted itself, the banks meanwhile introduced their Business Finance Taskforce in October 2010, which set out 17 commitments to improve access to finance.
The banks deserve credit for this initiative, which had the added advantage for them of allowing them to set the agenda for ‘doing something'.
Key highlights of the BFT's commitments include the new Lending Code/lending principles on dealing with SME customers, the new loan appeals process for declined requests, the creation of the £2.5 billion Business Growth Fund, the funding of a major new independent survey (the SME Finance Monitor), and various schemes to encourage mentoring of SMEs.
While we support many of the aims of these initiatives and the banks are genuine in trying to help business the main issue for us with the overall approach is that most of the action is cast as being on the ‘demand' side: Businesses not asking for loans or not asking in the right way being the problem rather than any issue with banks.
To be fair demand side issues are part of the picture. The number one factor bearing down on lending activity right now has to be the economic situation. Firms don't think now's a great time to borrow because their outlook is not looking good in the short term.
But supply constraints are surely also part of the picture.
What's the most obvious thing that's changed since the financial crisis? Is it a massive increase in the number of companies around that are unable to put together a decent business plan? Or has there been a change in the application and practice of lending from banks?
Should it be the credit risk of businesses or the credit risk of banks that is most important in determining the price of lending?